Nov. 26 (Bloomberg) -- Italian Prime Minister Silvio
Berlusconi’s era is fading into the “sunset” after his
government failed to bring an end to the country’s economic
crisis, former European Commission President Romano Prodi said.

“How long will be this agony? Nobody can tell you, because
these passages are always difficult,” Prodi said late yesterday
in a Bloomberg Television interview when asked if the government
will survive confidence votes next month. “The Berlusconi
period is, in any case, in the sunset, you know, going down.”

Berlusconi’s government faces a do-or-die test on Dec. 14,
more than two years before its term ends, when parliament holds
confidence votes after former ally Gianfranco Fini broke ranks
with the premier. The comments by Prodi, twice prime minister of
Italy, are the first he’s aimed at his former political opponent
since four government members who back Fini resigned this month
in a move that threatens to topple the administration.

“In these two years of government, it was clear that the
first goals were not shared by the coalition and were not fit to
end a long, lasting crisis for the country,” Prodi said in
Sarteano, Italy, where he was attending an economic conference
held by the main opposition Democratic Party.

Nobody ‘Indispensable’

Prodi, 71, denied any ambition of re-entering politics.
“No, not at all, I made an honest choice,” he said. “I teach
in the United States and Shanghai, I do like what am doing and I
do think you have to show people that, you know, politics is a
mission, is maybe temporary, and nobody is indispensable in
national political life.”

Prodi shepherded Italy into the euro as prime minister from
1996 to 1998. He led the Brussels-based commission, the EU’s
executive agency, from 1999 to 2004 and served again as Italian
leader from 2006 to 2008.

Italy, the euro region’s third-biggest economy, is unlikely
to expand more than 1 percent this year and next as the recovery
from the worst slump in six decades slows more than forecast,
employers’ lobby Confindustria said Nov. 17. Italy may miss its
goal of cutting the budget deficit to below 3 percent of output
in 2012 if growth proves weaker than the government’s projected
1.2 percent this year and 1.3 percent next, the Organization for
Economic Cooperation and Development said in a Nov. 18 report.

Prodi described Italy’s economic progress in the past
decade as “miserable” and said the country must “turn the
page in terms of growth, labor relations, education, research
and development.” He added that “in contemporary economy you
may increase productivity only if you attract foreign
investments, and from this point of view Italy is a disaster.”

‘Step Back’

Berlusconi said on Nov. 24 he expects to win the confidence
votes by a broad margin and that political instability may hurt
the country’s credit rating and make it more expensive to sell
bonds. He also called on Fini, a co-founder of his People of
Liberty party, to “take a step back” before trying to topple
the government at a time when investors are shunning the bonds
of high-debt euro-area nations after Ireland said it would seek
a bailout.

Italy’s borrowing costs rose at a sale of 8.5 billion euros
($11.3 billion) of six-month treasury bills yesterday as fallout
from Ireland’s debt crisis sent financing costs higher in other
nations in the region. The yield premium investors demand to buy
Italy’s 10-year debt over German bunds reached a euro-era record
of 190 basis points on Nov. 12. It was at 173 basis points today
as of 11:44 a.m. in Rome.

European Central Bank executive board member Lorenzo Bini
Smaghi said late yesterday in an interview with RAI television
that “if Italy respects the rigor in public accounts and pushes
through agreed budget measures, it won’t have any problems.”